VBOA Introduction Video · Approved: Active —CPE Exempt Status •CPA must apply for the Active...
Transcript of VBOA Introduction Video · Approved: Active —CPE Exempt Status •CPA must apply for the Active...
VBOA Introduction Video2
ETHICAL DECISION-MAKING
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AICPA Code of Professional Conduct
AICPA’s Professional Ethics Executive Committee (PEEC)
recently updated Code of Professional Conduct
• Effective Dec. 15, 2014
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Conceptual Framework
• Principles-based approach
• Only applies when the Code does not specifically address your question
• Cannot be used to override existing requirements
• Uses threats and safeguards
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Process: Steps of the Conceptual Framework
Step 1:Identify Threats
Step 2:Evaluate Threats
Step 3:Identify Safeguards
No Threats —
Proceed
Threats Not
Significant —
Proceed
Existing New
Step 4:Evaluate Safeguards
Threats Not at
Acceptable Level
— Stop
Threats at
Acceptable Level
— Proceed
Source: AICPA
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Threats
Adverse Interest Advocacy Familiarity Self-Interest
Self-Review Undue InfluenceManagement
Participation***
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Safeguards
• Safeguards created by the profession, legislation, or regulation
• Safeguards implemented by the employing organization
Ind
ustr
y
• Safeguards created by the profession, legislation, or regulation
• Safeguards implemented by the client that would operate in combination with other safeguards
• Safeguards implemented by the firm
Pu
blic
Accounting
Source: AICPA
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PLUS Ethical Decision-Making Model
https://www.ethics.org/resources/free-toolkit/decision-making-model/
7-Step
Model
Define the problem (consult PLUS filters)
Seek out relevant assistance, guidance and support
Identify alternatives
Evaluate the alternatives (consult PLUS filters)
Make the decision
Implement the decision
Evaluate the decision (consult PLUS filters)
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PLUS Ethics Filter
https://www.ethics.org/resources/free-toolkit/decision-making-model/
= PoliciesIs it consistent with my organization’s policies,
procedures and guidelines?
= LegalIs it acceptable under the applicable laws
and regulations?
= UniversalDoes it conform to the universal principles/values
my organization has adopted?
= SelfDoes it satisfy my personal definition of right,
good and fair?
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Case Studies
• Golf Guest
• Eager Development
• When Those 3 Initials Show Up at Your Door
• Worthless Inventory
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SERVICES TO THE PUBLIC
BEYOND VOCATION
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#CPAsGiveBack Video13
The Value of Giving Back
Volunteering:
• Can provide an opportunity for professional growth, enabling a
CPA to hone skills that may not otherwise
be utilized
• Is an opportunity to expand a CPA’s network
• Allows retired CPAs to maintain their skills and continue to
contribute to our profession and to the public
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Opportunities to Give Back
A CPA can, without a firm license, support a nonprofit entity by
volunteering as:
• Treasurer or other officer
• Board member
• A member of an organization’s finance or audit committee
• A volunteer bookkeeper, simply posting accounting transactions
• A service volunteer assisting in the entity’s mission, such as
providing manual labor, etc.
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The #CPAsGiveBack Challenge
• CPAs can provide significant knowledge, skills and abilities as
volunteers to not-for-profit entities that very much need assistance
• Typical CPA concerns relate to:
• Services requiring a firm license
• Enrollment in peer review
• Compliance with the profession’s technical standards
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Overcoming Hurdles to Volunteer
• Two very important questions:
• What service is to be provided?
• Often, a charity requesting an “audit” simply desires one or more auditing
procedures to be performed, not a “full audit”
• In what capacity will the CPA be providing the service?
• Virginia law provides an exclusion for CPAs serving as an entity’s officer or
governing board member
• A CPA serving as an audit committee member is not personally engaged to
perform a service
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Real-Life Scenarios
In the following slides, several specific examples will be
discussed. CPAs should keep in mind that the specific facts
and circumstances always govern any situation. The goal is
to use these examples to allow the CPA to volunteer and
support nonprofit entities if the CPA so desires.
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A Request for a Volunteer in Auditing
If a CPA is asked to volunteer to “help audit our books” by a nonprofit:
• The CPA first determines if the requested service is truly an audit
or simply two or three auditing procedures. A CPA may perform,
without a firm license, a few auditing procedures without issuing a
“full-blown” audit report.
• The CPA could reply by agreeing to serve not as an individual, but
as a member of an audit committee, to perform a few auditing
procedures.
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A Request for a Financial Statement
If a CPA is asked to volunteer to “prepare a financial statement” for
a nonprofit:
• The CPA may determine that the requested report is not a true
financial statement, so the service can be performed without
licensing issues.
• The CPA could reply that he or she could perform the service,
but only if appointed to the governing board or to an officer
position in the entity (this would avoid licensing issues).
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A Request to Serve as Treasurer
If a CPA is asked to volunteer to serve as the treasurer for
a nonprofit:
• CPA may serve as treasurer or as any officer without
licensing issues
• CPA may prepare financial statements as treasurer for the entity
without any licensing issues
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UPDATE ON RULES AND REGULATIONS
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Single License Renewal Date
• Expiration date will now be June 30 for all licensees
• License may be renewed up to 90 days prior to expiration
• Non-refundable renewal fee is $60 for individual and $75 for firm
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No Late Renewals
• No additional 12-month period to renew license
• Automatic Expired status the day after renewal is due
• Must apply for reinstatement and pay reinstatement fee of
$350 for individual and $500 for firm
• Responsibility for renewing a license rests with the licensee
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New Renewal Date Will Not Impact CPE
In any three-calendar-year reporting cycle a CPA must have obtained:
• 120 hours
• Minimum 20 hours per year
• Virginia-specific Ethics course — 2 hours per year
• 8 hours of accounting & auditing per year for those who release or
authorize release of reports
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Case Study: The Math for Matt
• Matt Walker, CPA, has been actively licensed in Virginia since
October 2007. He is currently planning his CPE for 2019 and is
concerned that he takes the proper number of hours.
• What is the total number of hours that Matt needs to take in 2019?
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Snapshot of Virginia27
Individuals
Number of Active, licensed CPAs 26,614
Number of Active — CPE Exempt, licensed CPAs 1,677
Number of Active — Renewal Fee Delinquent (<12 months), licensed CPAs 0
Number of out-of-state licensees 8,478
Reinstatements — Individuals 162
Number of new CPA licenses issued 1,097
Firms
Number of active, licensed CPA firms 1,169
Number of Active — Renewal Fee Delinquent (<12 months), licensed CPA firms 0
Reinstatements 8
Number of new CPA firm licenses issued 57
Virginia Board of Accountancy Licensee StatisticsAs of year-end 12/31/2018
Exam Candidates
Number of first time candidates applying to sit for CPA exam 1,720
Snapshot of Virginia28
Enforcement
Number of complaints 62
Types of complaints:
• Unlicensed activity 12
• Other disciplinary matters 50
Virginia Board of Accountancy Licensee StatisticsAs of year-end 12/31/2018
CPE Audits
Number of CPE audits requested 2,435
Status of CPE Audits:
• Number of CPE audits resulting in compliance 1,701
• Number of CPE audit deficiencies 316
• Number of CPE audit deficiencies resulting in surrender of license 28
• Number of CPE audit deficiencies resulting in suspension of license 26
• Number of CPE audits open/pending review 396
CPE and YOU29
CPE
Participation
Engagement
Discussion
Networking
Volunteering
Compliance
CPE Documentation Requirements
• Licensees must retain CPE documentation for the four calendar
years preceding the current calendar year
• For CPE takers: Certificate of completion (see
Appendix IV) or official college/university transcript
• For instructors: Syllabus/agenda and length of presentation
• For writers: Copy of published article, book or written material, or
proof of publication
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Approved: Active — CPE Exempt Status
• CPA must apply for the Active — CPE Exempt status and be
approved before ceasing CPE
• Licensee is considered actively licensed and may use the CPA title
• Licensee cannot provide services to the public or to or on behalf of
an employer which require the substantial use of accounting,
finance, tax or similar skills
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Active — CPE Exempt Status
Examples
Generally qualify for
Active — CPE Exempt
• Retired
• Not employed
• Missionary
• Teacher (non-accounting)
• Medical doctor
• Stay-at-home parent
• President/CEO of large company
Do not qualify for
Active — CPE Exempt
• Chief financial officer (CFO)
• Tax attorney
• Director of finance
• Comptroller/Controller
• Accountant
• Budget analyst/Manager
• Accounting professor
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CHANGES TO THE AICPA CODE
OF PROFESSIONAL CONDUCT
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What Changed in Ethics Codification34
Recent Changes to the Code
Section Title Effective Date
0.400.03 Attest ClientRevised December 2017
Effective Dec. 31, 2017
0.400.07 ClientRevised December 2017
Effective Dec. 31, 2017
1.400.200 Records RequestsRevised December 2017
Effective Dec. 31, 2017
2.130.010Knowing Misrepresentation in the Preparation
and Presentation of Information
Revised June 2017
Effective Aug. 31, 2017
2.170 Pressure to Breach the RulesAdded June 2017
Effective Aug. 31, 2017
1.295.143 Hosting ServicesAdded June 2017
Effective July 1, 2019
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Source: AICPA Code of Professional Conduct
Case Study
Unbiased Data
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STAYING ON THE
ETHICAL COURSE
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Poor Communication
• Poor communication is costly
• Companies lose approximately $62.4 million per year because of
inadequate communication to and between employees
• Poor communication may be caused by:
• Inaccurate language
• Lack of integrity
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Good Communication Is Ethical
• Ethical communication involves:
• Transparency
• Congruence between words and actions
• Ethical communication may be difficult to practice in high-stress
situations, such as when employees are at odds with each other
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Mediation Using Ethical Communication
• Techniques for Successful Mediation (taken from SHRM):
• Reflecting
• Summarizing
• Questioning
• Checking-In
• Caucusing
• Mediator should maintain:
• Clear guidelines for communication
• Exemplify a willingness to do what one says
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Ethical Communication Goals
• Encourage openness
• Be vulnerable
• Build trust
• Facilitate growth
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Online Presence
• Everything a CPA does online is part of his or her online presence
• How a CPA appears to the public represents:
• Employer
• Accounting profession
• CPA credential
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Biggest Social Media Scams in 201843
SCAMS
Catfishing
Profile Hijacking
Lottery Schemes
Quizzesthat mine
information
URL-shortening
Cons
Money-flipping
Urgent email from an
executiveJob recruiter
who just needs a little information
5 Tips to Reduce Social Media Fraud
• Vet your social circle
• Don’t give out personal information
• Improve and don’t reuse passwords
• Update your privacy settings
• Understand the agreements you enter online
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Cybersecurity — Profession Must Step Up
• CGMA survey results:
• 95 percent of respondents stated that they were concerned with the threat
of database breaches, distributed denial of service (DDoS) attacks,
phishing scams and other cyberattacks
• 30 percent said that they had fallen victim to a cyberattack in the last two
years (22 percent in 2014)
• 72 percent of the sampled companies had asked their finance function to
take more responsibility to mitigate these risks
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Cybersecurity
AICPA Cybersecurity Resource Center
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Security Education
Developing Organizational Thinking Around
Cybersecurity — Tactical Level
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Cybersecurity
Greet Office
Visitors
Minimize Administrative
Privileges
Proper Information Disposition
Updated Operating Systems
Antivirus/Malware
ApplicationsHire
Cybersecurity Expertise
Protected Backups
Enforced Password
Policy
Phishing Awareness
Breach Response
Plan
Limit Mobile Access
Cybersecurity Insurance
Screen Potential
Employees and Contractors
Review IT Policies
Secure Physical Access
Secure Client Transmission
Enhanced Password Controls
Secure Staff Connections
Current Network
Operating Systems
Data Tracking/Access
Automatic Screen Locking
Next Steps
• Complete evaluation at surveymonkey.com/r/2019VAEthics
(which will also be emailed to you)
• Check the status of your CPA license (and firm license,
if applicable)
• Check your CPE information in the VBOA tracker
• Visit vscpa.com/EthicsResources for updates
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